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ing. market predictions of the outcome of the 2012 presidential race. in today's cover story, inside the legal battles that are already forming connected to problems at the polls. plus, the cost of winning. an estimated 6 billion dollars has been spent on the election. a look at what that money means for the results. forget party lines. why one trader says what really matters is the bottom line. and, why you may feel better about filling up your gas tank in the days ahead. first business starts now. you're watching first business: financial news, analysis, and today's investment ideas.
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good morning. it's tuesday, november 6th, election day 2012. in today's first look: muted market action on monday. stocks made modest gains while gold added $10 and edged up less than one dollar. gas gouging. disturbing reports are surfacing about people trying to profit on superstorm sandy by selling gas for as much as $20 per gallon including on craigslist. and finance ministers and central bankers of the g-20 are commiting to stregthen efforts to hold up the sluggish global economy. let's get the feeling from the trading floor with john brady of rj o'brien. happy election day to you. what do you anticipate will happen in market action? > > i think today will probably march sideways. i think most of the attention will be on tonight and maybe the early morning hours tomorrow as regards the election races. now, it's not just the presidential race that will have the markets focused. keep in mind there are
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34 senatorial seats that are likewise up for election, and as markets start to look ahead toward the fiscal cliff, which will start wednesday or thursday, as soon as these results are announced, then equations and challenges regarding the fiscal cliff need to be weighed by the market, and that will be the next big trade for the market. > > i think another big wave would be greece, with this new threat of a possibility of a euro exit. > > i think that's right, and of course, greece is going to see some very important elections on november 11th, and of course the syriza party could do very well in those elections, so we're going to have labor strife for the next two days in the streets of athens, and it will probably make markets a little bit jumpy for sure. > > and over in commodity world, have we seen some tops here in gold and oil, perhaps? > > i think that these moves have come in sync with a global slowing economy. if you look at monday's non-manufacturing ism survey for the month of october, some of the weakness, specifically generated in the export sector of that important number, suggests the global economy is slowing. so gold has
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moved in sync with crude-oil. i think part of the gold trade, too, is perhaps on a stronger u.s. dollar, and that of course could be a vote on perhaps a romney victory later on tonight. > > good to have you on the show today. that's john brady of rj o'brien. in battleground states such as ohio, hundreds of lawyers have shown up to monitor polls on election day. in our cover story, it's one of many pre- emptive steps being taken to avert a recount that, in ohio's case, could take weeks and delay the election's outcome. while former governor romney and president obama criss- crossed the country in last- minute campaign efforts, more than 200 lawyers from the non- partisan "election protection" group spread out across states such as ohio to make sure potential voters were not discriminated against or intimidated. legal challenges that could delay the outcome for weeks are the last things investors say they want. "the worst thing for business is uncertainty, and that's what's affecting the market now." already there have been two dozen lawsuits within the past
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six months challening photo i.d. requirments and limited poll hours. "there's trillions of dollars sitting on the sidelines. trillions." if the vote is close, it could trigger recounts. in florida, a recount must be completed within 12 days. but in ohio it could take more than a month. and there's provisional ballots, ballots counted only after a voters' elgibility has been proven. more than 200,000 provisional ballots were cast in ohio in 2008. more are expected this time. "my expectation is that by the end of november, we'll know what the outcome is." what triggers a recount varies from state to state. for example, in ohio, a quarter of one percent; in colorado, florida and pennsylvania, half of one percent.
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but what if obama and romney tie in the electoral college? "technically, if there's a tie, it would go to the house and romney would win becaue the members would vote by party, i think." election protection has a hotline if you want to report actions that impede voting. the number is 866-our-vote. some traders are turning to the charts rather than the polls for clues about the election direction. alan knuckman of option shop joins us this morning. good morning. similar to the way you chart stocks, you have been watching the intrade charts on this election throughout the season. here we are. it's election day. what does the chart say? > > the probability markets tell us a lot. as a trader, we've got to remember that we're capitalists. we're not democrats, we're not republicans. we want to see the markets move and take advantage of whatever opportunities are out there. looking at the charts, the price chart on mitt romney had been in an uptrend from september of 2011 to september 2012, but we have been unable to regain that
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uptrend angle, and if it can't get above that trend line, that resistance at 40, it looks like probability is not on mitt romney's side. > > now, fair to say, just like with a stock, the charts are not 100%, correct? > > of course not, but the idea is it's a price mechanism that determines and distills out the price. based on all the information that everybody knows, they buy or sell accordingly, and right now, things are very favorable to the president. > > thank you alan for that update. gas prices may be on the minds of some voters today. nationwide, the averge cost of a gallon of gas has dropped to $3.49 - the largest price drop since 2008. higher oil supplies, along with superstorm sandy, are contributing factors. drivers can expect prices at the pump to continue to drop over the next 7 to 10 days, but will bump back up a little as the northeast refineries recover from superstorm sandy. dr. michael walden, resource economics specialist at north carolina state university, says the lower prices could be a factor as voters head to the polls today. "right now the data indicates that consumer confidence really has reached a high in the last couple of years. that's usually
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good for the incumbent, so i think in this case the president may be bolstered a little bit by the fact that gas prices have gone down and consumer confidence has gone up. whether it will turn the election or not i obviously don't know, but i think that is favorable to the president." even california gas prices have dipped down, reaching below the 4-dollar mark for the first time since august. general motors' balance sheet is a whole lot stronger today. gm now has $11 billion in credit lines. meanwhile, the auto bailout that put the automaker on the road to recovery has come into play this election season, most recently with republican presidential candidate mitt romney suggesting chrysler would move jeep production to china, followed by the ceo of chrysler sayng jeep production will stay put in the u.s.a. more veterans are fighting for jobs in congress. a study by george washington university finds that more veterans are running in "winnable races" within their congressional districts. 107 veterans are on
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the ballot in today's election. the majority are running for re-election; however, depending on the vote, new names on the ballot could push the number of veterans in congress to the highest level since 1980. retailers are hinting at strong numbers this holiday season. a new survey from bdo usa shows retailers are the most optimistic they've been in 5 years. the flurry of new tablets and other gadgets coming onto the market in time for christmas could lead to especially strong sales of consumer electronics. the bdo survey projects total holiday sales increasing by 4.7%. the national retail federation predicts 4.1%. it's not clear if superstorm sandy will dent holiday sales. banks are still struggling to reboot following superstorm sandy. in an effort to help consumers dealing with the after-effects of the storm, jpmorgan chase, citigroup and wells fargo are waiving many fees until tomorrow. meanwhile, power failures are forcing some banks to revert back to pen and paper to record transactions. banks are also stocking up on cash due to atm failures. demand for cash is up, as more
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consumers need money to pay for damages. toyota is bouncing back from natural disasters, recalls and declining sales. the car company's net profits tripled in the 3rd quarter. toyota is also raising its full-year forecast by 2.6%. this year toyoya has sold more cars than gm and volkswagon, even though sales slipped as chinese consumers boycott japanese brands. a former general motors employee and her husband allegedly stole $40 million in trade secrets from gm to sell to china. the couple is on trial this week after prosecutors say the two planned business ventures with gm competitors in china. they were indicted in 2010 on three counts each of trade theft and wire fraud, to which they pled not guilty. the defendants argued that the u.s. government withheld evidence in the case and denied their rights to a fair trial. their attorneys were expected to make statements at the opening of a new trial on monday. netflix investors are fending off a potential hostile takeover, perhaps by corporate
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raider carl icahn. netflix shareholders have adopted a plan known as a "poison pill." if someone attempts to buy a large chunk of the company without approval of the netflix board, the company can flood the market with new shares, making it tougher for ichan to buy more stock. it was revealed last week icahn bought a nearly 10% stake in the video rental company. earnings season charges on. at tesla, sales of its new electric model "s" sedan topped expectations. shares revved up $2 on the news even though revenue fell 13%. humana's third quarter beat forecasts even though profits were down. the company, however, raised its earnings expectations for the full year. also, humana plans to buy metropolitan health networks to boost is medicare advantage business. time warner missed estimates as cable customers cut back on spending. the bright spot for the company: political ad spending. american pilots are closer to a
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historic amount of spending in this election will affect the outcome, later on. but first on this election morning, should you be concerned about portfolios' performance post-election? bill moller on what you can expect - next.
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maybe tomorrow the outcome of the election today. but we can make some informed judgments about the impact each party
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would have not just on the u.s. economy, but on our personal household economies. for a fact-based, non-partisan assessment, we turn to jim cahn. he's the chief investment officer for the wealth enhancement group. there's bound to be some short-term churn in the markets, but long-term, what is the impact on our personal portfolios from the two parties? > > thanks for having me here. i think we assign a little bit too much weight to the presidential election in terms of how it's going to impact the economy. the economy seems to be on an upward trend, and regardless of whether obama wins or romney wins, i think our portfolios are going to be getting a little bit better in years ahead. obviously, the two candidates have different tax policies. those tax policies, depending on who wins, may impact some year-end decisions, especially around tax planning. > > let me ask you about the fiscal cliff that affects potentially both portfolios and taxes. are you advising your clients to prepare? and if so, how? > > we think that going over the edge of the fiscal cliff is quite unlikely. we're talking
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about sending the economy back into recession. politicians don't like recessions, and neither do their constituents, and as a result, we are advising our clients to maybe take some year-end gains, if they have gains, and put that in their portfolios, because we do believe that capital gains rates are likely to go up. the we're not specifically preparing for the fiscal cliff. > > so capital gains, you would be selling now. how about maybe municipal bonds? some people are buying lots of those right now. > > we think that tax rates are likely to go up in the near- term, regardless of which party wins. so even though romney is talking about cutting taxes across the board, he's also talking about cutting deductions. so really, if you're sort of a higher-net- worth person, your taxes are probably going up, because you won't have charitable deductions, your mortgage deduction, even if romney wins. so as a result, municipal bonds do look attractive to people who have meaningful amounts of income. > > that's reassuring, not to be worried about the short-term, but i guess that's sort of the philosophy and advice for any long-term investor. > > the problem is that it
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sounds really good to say that you think you know what's going to happen in the short-term, and then to make predictions about the markets and therefore recommendations about where to put your money. but anyone who is telling you they can predict what is going to happen in the short-term, if they get it right, they're just lucky, and we don't like to be lucky, we like to be smart, that's why we have sort of focused on the long-term as opposed to the short-term. > > people shouldn't be driven by the herd, too. a lot of that thinking goes on as they panic and swing one way or the other. > > that's about the worst thing you can do. basically, if your instincts are telling you to sell, you probably want to buy, and if your instincts are telling you to buy, you probably want to sell. human instincts are not particularly the best way to make decisions in equities. > > the old contrarian view. jim cahn. > > absolutely. > > thank you so much. > > thank you. still ahead, it has been the most expensive election in our nation's history. paul eggers breaks down the numbers - next.
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w never look a howler monkey in the eye. fried ants are delicious. really. my students actually ended up teaching me. (foreign language) you think managing a sales team is tough... try working with five different villages. after two months i was ready to quit, but after two years, i didn't want to leave. i didn't know i had it in me. turn two years of service into a lifetime of experience. to all theeace corps volunteers past, present, and future, thank you for your service to your country and the world.
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at last, after months of political ads, we will finally be safe from the non-stop barrage of campaign commercials. paul eggers adds up the cost from one of the most expensive elections cycles in history. it's going to be a while before you hear candidates closing out commercial breaks or you see lots of leaflets filling up your mailbox. all that communication, of course, came at a big cost. add up all the money spent on the race for the white house and for control of congress, and you'll get an estimated 6 billion dollars. that tops the previous campaign spending record by $700 million and is about equal to the gdp of the uber-rich riviera princiality monaco. the now- famous supreme court citizens united decision played a big role in the big money boom, allowing deep-pocketed political
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players to donate unlimited amounts to outside groups, or so-called super pacs, who spent nearly $1 billion on all races this campaign cycle, with a majority going to the presidential contest but more than $400 million funding congressional races. 'fundamentally, our constitution gives us the right of free speech, and it's my belief that super pacs are just exercising that right. 'yes, there is a first amendment right to free speech, and individuals ought to have free speech, but i'm not convinced money is the same thing as speech.' regadless of where one stands on the legal basis of super pacs, their growing influence measured in the dollars they spend cannot be doubted. just 20
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years ago, outside groups spent just $18 million on campaigns. in 2000, that number grew to $41 million, and in 2008, it boomed to $286 million. still, those figures fall far short of the nearly $1 billion spent this time around. 'it's going to be very difficult to reign in the super pacs.' but not all types of outside groups are raising more money. superpacs classified by the irs as 527s must dislose donors, whereas 501 c-4s, or so-called social welfare, can keep that information secret. ron gidwitz runs a 527 superpac called the new prosperity foundation, which supports republican house candidates. > >do you think there's a trend away from 527s to 501c4s? "in many cases, yes, there has been." and the numbers bear that out. 527 funding actually fell from 2008 to 2012, meaning more of that nearly $1 billion of
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campaign spending by outside groups comes from donors who do not need to disclose their name. reporting for first business news, i'm paul eggers. both simpson and gidwitz agree that so long as citizens united stays in place, the 2016 presidential election is sure to be a financial record-breaker for political ads. up next, what the market may have been telling us all along about the election, when we come back.
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in chart talk on this election day, we are going to play a game of true-or-false about the market with matt shapiro, president of mws capital. matt, true or false: the market will rally if gov. mitt romney wins and sell off if president obama is re-elected? that's one of the stories i've been hearing circulating around. > > it is, and i couldn't disagree more, because obama has been positively correlated, his
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momentum - for instance, the prediction market in the polls is positively correlated with the stock market. handling accounts for many people, actually, i have my red state shirt on, but i really think a change in administration would not be great for the markets, and a lot of big money managers also are concerned about perceptions of the u.s. deficit if romney wins. > > now what about what the market has already been telling us? the markets are very smart. the market is forward-thinking. has the market already priced in this election? > > well, i don't think it has, and i would be very surprised to see if we know who the president is by midnight tonight, so it's priced in, actually, a lot of uncertainty. we have given back the highs we had about a month ago, and we're kind of just sitting here around 1410, 1415 on the s&p 500. so i think what the markets are going to want, and hopefully will get by the end of the week, is a clear-cut victory and lots of momentum, because remember, many
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of those people who support mitt romney are going to vote their hearts, actually are people who have a lot of capital and are concerned about investing. so, at the end of the day, i think this election will help america move forward, and i would like to see a lot of positive momentum going into the christmas santa claus rally season. > > you may get that, there may be a big relief rally when all of this is over. we'll all be relieved, matt. good to have you on the show. have a good day. > > thanks. coming up tomorrow, we will take a look at stocks and sectors that are pro-governor romney and pro-president obama. from all of us at first business, happy election day.
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. the unusual move one presidential candidate is making today as they head to the pole. three people are behind bars this morning after the death of a baby in marin county, what the coroner found that led to their arrests. it is all on the ktvu channel 2 morning news.
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complete coverage starts right now. this is ktvu channel 2 morning news. well, good morning, it is election day. >> it seems like it is going to be nice weather. >> today will still be sunny nice to warm and we will lose a little bit of that offshore component it will not be that night but we have big changes later in the week, here is sal. there is road work and it is not causing major delays, this is a look at westbound 24 and traffic is looking good between walnut creek and oakland. also the morning commute looks good between interstate 880 south and northbound. the poles are open here at 00

First Business
FOX November 6, 2012 4:00am-4:30am PST

News/Business. Angie Miles. (2012) New. (CC) (Stereo)

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